News Article

Senators Coons and Moran Reintroduce Bill to Level the Playing Field for Renewables

U.S. Senators Chris Coons (D-DE) and Jerry Moran (R-KS), and Representatives Ted Poe (R-TX-02) and Mike Thompson (D-CA-05) re-introduced bipartisan legislation to level the energy playing field by giving investors in renewable energy projects access to a decades-old corporate structure whose tax advantage is currently available only to investors in fossil fuel-based energy projects. The Master Limited Partnerships Parity Act is a straightforward, powerful modification of the federal tax code that could unleash significant private capital by helping additional energy-generation and renewable fuel companies form master limited partnerships, which combine the funding advantages of corporations and the tax advantages of partnerships.

“Renewable energy technologies have made tremendous progress in the last several decades, and they deserve the same shot at success in the market as traditional energy projects,” Senator Coons said. “By updating the tax code, the bipartisan Master Limited Partnerships Parity Act levels the playing field for all domestic energy sources -- renewable and non-renewable – to support the all-of-the-above energy strategy we need to power our country for generations to come. This practical, market-driven solution will unleash private capital and create jobs, and that’s why it has earned broad support from Republicans and Democrats in Congress as well as academics, outside experts, business leaders and investors.”

“In order to grow our economy and increase our energy security, sound economic tools like master limited partnerships should be expanded to include additional domestic energy sources,” Senator Moran said. “MLPs have a proven record of success through real growth in our country’s energy infrastructure. This legislation builds on a successful model, and I look forward to working with my Senate colleagues on policies that will drive innovation, create American jobs, and grow our economy.”

“It is time for the United States to make Middle Eastern turmoil irrelevant to our energy security,” saidRepresentative Poe. “In order to do this we must pursue a comprehensive energy strategy that empowers allsources of domestically produced energy. This common-sense bill will help do just that. It is time for Washington to get out of the way and make it easier not harder to produce energy in this country.”

“We need to take an all-of-the-above approach to America’s energy future,” said Representative Thompson.

“This bipartisan bill will make it easier and more attractive for private capital to be invested in renewable energy. By leveling the playing field and treating renewable energy the same way we do oil and gas, we can create jobs, strengthen our national security, reduce our dependency on foreign oil and move closer to energy independence.”

A master limited partnership (MLP) is a business structure that is taxed as a partnership, but whose ownership interests are traded like corporate stock on a market. By statute, MLPs have only been available to investors in energy portfolios for oil, natural gas, coal extraction, and pipeline projects.

These projects get access to capital at a lower cost and are more liquid than traditional financing approaches to energy projects, making them highly effective at attracting private investment. Investors in renewable energy projects, however, have been explicitly prevented from forming MLPs, starving a fast growing portion of America’s domestic energy sector of the capital it needs to build and grow.